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Here's Why Hold Strategy is Apt for MPLX Stock Right Now

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·2 min read
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MPLX LP MPLX has seen upward earnings estimate revisions for 2022 in the past 30 days. The stock, carrying a Zacks Rank #3 (Hold), is likely to witness earnings growth of 13.6% this year.

What’s Favoring the Stock?

Being a leading midstream energy player, MPLX has the least exposure to commodity price fluctuations. This is because the midstream assets are contracted by shippers for the long term. The assets of MPLX comprise a network of pipelines that carry crude oil and refined products. MPLX also generates cashflows from fuel distribution operations.

The key assets of the large-cap master limited partnership comprise crude oil and natural gas gathering systems and pipelines. In the prolific supply basins in the United States, MPLX has natural gas and NGL processing and fractionation facilities.

Apart from gauging low-carbon opportunities, MPLX is banking on several organic growth projects. Backed by its stable and growing business, the company is committed to returning capital to unitholders.

Risks

Compared to composite stocks belonging to the industry, MPLX has significant exposure to debt capital. The lower average tariff rate for the crude oil pipelines is hurting the midstream player’s bottom line.

Stocks to Consider

Better-ranked players in the energy space include Antero Resources (AR), Whiting Petroleum WLLand Matador Resources Company MTDR. All the stocks sport a Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Antero Resources is a leading upstream energy player with a strong presence in the gas-rich prolific Appalachian Basin in West Virginia and Ohio. In the past 60 days, Antero Resources has witnessed upward earnings estimate revisions for 2022 and 2023.

The substantial exposure to improving commodity price is a huge positive for Antero Resources.

Whiting Petroleum is a leading upstream energy company and the top producer of crude oil in North Dakota. With oil prices improving rapidly, Whiting Petroleum is expected to continue generating handsome cash flows while maintaining a healthy balance sheet.

Headquartered in Denver, CO, Whiting Petroleum has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days.

Improving oil prices is a boon for Matador Resources’ upstream operations. This is because MTDR has a strong presence in oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin. Favorable oil price is likely to aid Matador Resources in increasing production volumes.


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MPLX LP (MPLX) : Free Stock Analysis Report
 
Whiting Petroleum Corporation (WLL) : Free Stock Analysis Report
 
Matador Resources Company (MTDR) : Free Stock Analysis Report
 
Antero Resources Corporation (AR) : Free Stock Analysis Report
 
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